Canada saw a rise of 75,000 jobs in July, marking a 0.4% increase and pushing the unemployment rate down to 6.4%, the lowest level in two years. Statistics Canada’s recent labor force survey indicated that the majority of job gains were distributed between full-time and part-time positions, with the wholesale and retail trade sector alone contributing 21,000 new jobs.
Employment growth was noticeable among individuals aged 25 to 54, particularly impacting women in that age bracket. While the unemployment rate for men aged 25 to 54 remained steady at 5.8%, it dropped to 5.2% for women in the same group. Ontario led in job creation among provinces, adding 52,000 jobs (0.6% increase), mainly in the professional, scientific, and technical services sector. British Columbia also saw a significant uptick, with 18,000 new jobs added.
Manitoba experienced a 0.8% increase in employment, adding 5,900 new jobs, while Nova Scotia saw a similar rise of 0.8%, creating 4,600 jobs. Overall, Canada has gained 181,000 jobs since April and 196,000 jobs compared to a year ago. This positive trend in July follows favorable job reports in May and June.
Notably, the surge in job numbers exceeded expectations, with CIBC senior economist Andrew Grantham attributing it to robust hiring in July. The summer job market for students was particularly strong, with youth unemployment (ages 15 to 24) hitting its lowest level since early 2024. However, the unemployment rates varied among racialized youth, with Black youth at 22.6%, Chinese youth at 15.4%, and South Asian youth at 13.9%, compared to 11.6% for non-racialized and non-Indigenous youth.
While the overall unemployment rate of 6.4% is the lowest in two years, it still falls short of the full employment threshold, noted Grantham. BMO chief economist Douglas Porter pointed out that despite positive employment trends, average hourly wage growth has slowed to 2.8% year-over-year, the slowest in four years.
Economists suggested that the labor market is stabilizing after a mild contraction in the first quarter, with businesses adapting to trade-related uncertainties. Canada is facing impending trade challenges, including potential tariffs on Canadian imports threatened by U.S. President Donald Trump, set to take effect on August 19. Canada is urging the U.S. to reconsider these tariffs and is seeking relief from sectoral tariffs on industries like steel and aluminum. Discussions on the Canada-United States-Mexico Agreement are also set to resume in the fall.